An important mechanism that helps clubs to avoid financial issues when they are demoted out of a top-flight league is ...

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Parachute payments are designed to help clubs financially adjust to the lower revenues from playing in a lower league. When a club is relegated from a top-flight league, they receive a parachute payment from the league to help them adjust to the lower revenue of the lower league. This helps the club avoid financial issues and potentially bankruptcy.

An Important Mechanism That Helps Clubs to Avoid Financial Issues